Thursday 15 November 2012 09.27 EST
First published on Thursday 15 November 2012 09.27 EST

Egypt's president, Mohamed Morsi, has condemned Israel's "aggression", as three Israelis were killed by a Hamas rocket, Israel continued to pound the Gaza Strip and the enclave lurched closer to all-out war.

In his harshest criticism of Israel since taking office in June, Morsi expressed his solidarity with the "people of Gaza" and the Palestinians. Speaking in Cairo, Morsi said he had withdrawn Egypt's ambassador to Israel and appealed to the UN to intervene to halt the spiralling violence.

"The Israelis must realise that this aggression is unacceptable and would only lead to instability in the region," Morsi declared. His remarks illustrate the new and potentially volatile dynamics of the situation in the region, with Egypt's post-revolutionary government expressing strong support for Hamas.

The peace treaty between Egypt and Israel now looks increasingly fragile, following the ousting of Hosni Mubarak in February last year, and as the violent confrontation between Hamas and Israel worsens. Morsi said he had spoken to the US president, Barack Obama, by phone. The Egyptian president said he wanted to maintain good relations with the US while "rejecting this aggression and the spilling of blood and the blockade of Palestinians".

Israeli warplanes bombed targets on Thursday in and around Gaza City, where tall buildings trembled. Plumes of smoke and dust furled into a sky laced with the vapour trails of outgoing rockets, Reuters reported. The Palestinian death toll rose to 15, with the victims including a woman pregnant with twins, an 11-month-old boy and two infants. At least 130 people had been wounded, Gaza's health ministry said. Israel said it had struck 156 targets in Gaza, 126 of them rocket launchers.

The Israeli military onslaught follows the assassination on Wednesday of Ahmed al-Jabari, the commander of Hamas's military wing. His corpse was borne through the streets wrapped in a bloodied white shroud. Thousands of mostly young men attended his funeral on Thursday, crowding around his grave. Mourners strained to stroke Jabari's face and clutch his hands. The funeral took place against a backdrop of gunfire, with tracers from Israel's Iron Dome missile-defence batteries visible, shooting down rockets fired from Gaza.

Witnesses spoke of a mood of fear. Hamas supporters, many wearing trademark Hamas baseball caps, fired in the air at the funeral to celebrate news of the three Israeli deaths. There were chants for Jabari of: "You have won." Senior Hamas figures stayed away, wary of Israel's warning that they are now considered targets. Militants in the Gaza Strip pounded southern Israel with rocket fire.

Life on both sides of the border came to a standstill, the Associated Press reported, with Gaza's streets mostly empty as the strip came under Israeli attack. Residents in southern Israel remained huddled indoors or close to home, and were under orders to stay in bomb shelters. The three Israelis were killed when a rocket hit their four-storey building in the town of Kiryat Malachi, 15 miles north of Gaza. A four-year-old boy and two babies were also wounded. The victims were the first on the Israeli side since the violence started.

Israel said 200 rockets had struck Israel since Wednesday, 135 since midnight. Israel's Iron Dome missile-defence batteries had shot down 18 of them, officials said. Hamas claimed it had fired a one-tonne rocket at Tel Aviv, but there was no sign of an impact in the city.

"The military will continue acting to establish deterrence against Hamas and to return the calm," the defence minister, Ehud Barak, said during a tour of southern Israel. He praised citizens for coping with the "tough moments to come".

Qatar, Jordan, Iran and Syria all condemned the Israeli operation on Thursday. It amounts to the most serious fighting between Israel and Hamas for four years. William Hague, the British foreign secretary, blamed Hamas and said it bore "principal responsibility for the current crisis". He also urged Israel to reduce tensions and avoid civilian casualties. On Wednesday the Obama administration unequivocally backed Israel and said it had a right to self-defence.